It seems that the Chinese won't be gettinginto the World Trade Organization any time soon.
Even if China can convince its major trading partners that it will open its markets, Congress will block U.S. companies from approving China's membership in the WTO.
At this point, U.S. trade negotiators don't even have trade concessions from China as an inducement to win congressional support.
"So what?" you ask. Ask again, because it should be vital to anyone working in the electronics industry. Careers, sales targets-not to mention tons of frequent-flyer miles to the Orient-could ride on China's acceptance into the WTO.
China's entry hinges on its ability to lift trade barriers, and the creation of a true open market could translate into bigger exports to China, the elimination of chip tariffs, sizable cuts in other electronics duties, more effective joint ventures in the country, and more direct access to domestic customers.
Such a proposal was put on the table last spring by Chinese Premier Zhu Rongji. But President Clinton vetoed the deal, demanding even more concessions. The political tactics backfired when Rongji, facing his own critics back home, deep-sixed the original offer. The Clinton administration has been struggling ever since just to get the China trade deal it had previously rejected.
Even if the United States and China can finally strike a last-minute bilateral trade deal, it's certain that Congress will veto any agreement short of selling all the state-owned enterprises to Tyco International Ltd.
So don't enroll in a crash Mandarin course just yet. Free trade is still on a slow boat to China. Expect business with the Middle Kingdom to be status quo for a while longer.
Yet, despite a maze of trade barriers, many U.S. electronics companies have gotten a good start, and have even prospered in China. But it's a dicey business in a country with only a vague rule of law, an oppressive bureaucracy, constantly changing regulations, and persistent corruption.
Americans should take lessons from Taiwanese industrialists who have invaded China with plants and operations. No matter that the two states-or should I say the renegade province and China-are at political loggerheads again. Taiwan's electronics manufacturers are flocking to China for low-cost labor and cheaper production, and perhaps to escape earthquake disruptions.
The more immediate U.S. WTO concern should be dumping, which Japan and Korea are trying to put on the negotiating agenda for the next round of WTO trade talks. But more on that next week.